Lawmakers applying that pressure for more natural gas exports

posted at 2:01 pm on March 6, 2014 by Erika Johnsen

Europe gets roughly a third of their total natural gas imports via Russia, and as a a few forward-thinkers have been advocating for a couple of years now, one of the best ways to blunt the influence of the energy supply from any one country or organization is to keep pouring more oil and gas into the global bathtub that is the world’s energy market. OPEC has been in a semi-panic over the United States’ burgeoning shale boom, and if we had done ourselves a favor a while back by permitting more exports of crude oil and natural gas, we might have been in a better position to deal with Russia right now. A bunch of lawmakers are rightfully taking advantage of this moment to push that line of thinking, via Politico:

Momentum is building in Congress to wield the United States’ vast natural gas resources to break Vladimir Putin’s energy stranglehold over Ukraine — although some lawmakers acknowledged their efforts would have no immediate impact on the crisis in Crimea.

Sen. Mark Udall (D-Colo.) and Rep. Ted Poe (R-Texas) introduced bills Wednesday to make it easier to export natural gas to countries including Ukraine, and the House Energy and Commerce Committee is working on its own legislation. Meanwhile, Sen. John Barrasso (R-Wyo.) is seeking new momentum for a bill he introduced last year that would give Ukraine, Japan and NATO members the same preferential access to U.S. gas as countries that have free-trade agreements with the United States. …

Energy Secretary Ernest Moniz told POLITICO he’s open to consulting with Congress on the issue, but he stressed that the U.S. doesn’t have the capacity to flood Europe with gas. “The fact is it’s just physically not going to happen,” he said Wednesday. …

Expect other legislative efforts to follow, said Sen. Mark Begich (D-Alaska), a co-sponsor of Barrasso’s and Udall’s bills.

Politico goes on to note that “even if the pressure from Congress prods the Energy Department to move faster, the practical effect anytime soon would be nil” — but that isn’t exactly accurate. It’s true that, even if we started approving export terminals right away, it could take a few years before all of these infrastructure projects are physically up and running, and Ukraine itself doesn’t even have the necessary facilities for converting liquified natural gas back into natural gas for use in power plants — but even just sending out the right pro-infrastructure, pro-production signals on the world market can have a mollifying effect.

The Obama administration has totally dragged its feet on the energy-export front, and now we’re reaping the rewards of that hesitation. Even if approving exports at an accelerated pace would be too little, too late for Ukraine at the moment, now is as good a time as any to get to work and start taking advantage of both the economic and geopolitical benefits for the taking.

Blowback

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I am torn on Natural Gas exports. On one hand it allows a much larger market for our gas, on the other hand it will increase the price in the US. US manufacturing has a huge competitive advantage right now due to the lower cost of natural gas.

The Gulf drilling moratorium was not done so much to assure people of the Gulf Coast, but rather to please the “Progressives” who support Obama.

Furthermore, the economic damage from the moratorium is concentrated in states that did not give Obama its electoral votes, Texas, Louisiana, Mississippi, and Alabama.

This is similar to Bill Clinton’s land grabs and environmental moratoriums, which tended to be aimed at states and localities that did not vote for him, but pleased the “Progressive” voters of large cities that were not affected.

We have a President who isn’t even interested in securing domestic supplies of oil and natural gas. What makes you think he is interested in securing political advantage by way of oil and natural gas exports?
Obama has demonstrated himself time and again to be a foreign policy naif.

although some lawmakers acknowledged their efforts would have no immediate impact on the crisis in Crimea.

I remember hearing the same stupid arguments back in 2007-2008 when Drill Here Drill Now was the battle cry. The Left said then that we wouldn’t see any immediate impact to gas prices so we shouldn’t do it. They said the same thing when Clinton was in office. If we had drilled then we would have avoided the $4/gal in 2007-2008.

We really need to spend big money and crush the GD eco-Marxist movement once and for all. They just spread misery.

Is it fairly cost effective to convert NG to liquid for shipping then back to gas again at the receiving end? I assume even if we were geared up fo this, we would end up playing a cat and mouse game with OPEC and Russia regarding price of competing fuels.

I remember hearing the same stupid arguments back in 2007-2008 when Drill Here Drill Now was the battle cry. The Left said then that we wouldn’t see any immediate impact to gas prices so we shouldn’t do it. They said the same thing when Clinton was in office. If we had drilled then we would have avoided the $4/gal in 2007-2008.

We really need to spend big money and crush the GD eco-Marxist movement once and for all. They just spread misery.

Charlemagne on March 6, 2014 at 2:21 PM

I also remember when W announced plans to permit drilling on leased lands. Oil and NG prices dropped overnight. The same could happen for California. We could wipe out our deficit and be debt-free in a matter of days if the state would permit coastal drilling.

I remember hearing the same stupid arguments back in 2007-2008 when Drill Here Drill Now was the battle cry. The Left said then that we wouldn’t see any immediate impact to gas prices so we shouldn’t do it. They said the same thing when Clinton was in office. If we had drilled then we would have avoided the $4/gal in 2007-2008.

We really need to spend big money and crush the GD eco-Marxist movement once and for all. They just spread misery.

Charlemagne on March 6, 2014 at 2:21 PM

Back in 1984 we were told that if we allowed further drilling for oil in Alaska it would take twenty years for that oil to get to market, so why bother?

Obama’s metastasizing autocracy — We fret about democracy in the Ukraine while Obama treats the Constitution as a series of suggestions. For the president, the three branches of government are him, his pen and his telephone.

Putin is a strong man. Obama is a weak man (except when it comes to bullying our allies). Obama venerates multilateralism. Putin is willing to go it alone. Obama is committed to the entire LGBT agenda (including gay “marriage”). He’s also the only sitting president to address Planned Parenthood, such is his commitment to abortion without borders. Putin believes the foregoing is the road to national annihilation.

Reagan used our buildup of the military to break the Soviet Union, they could no longer keep up with us and they folded. We should be using our vast energy resources to do the same. I thought libruls were all for a non-military solution, it is staring them in the face.

The cat and mouse is that Putin could no longer threaten supply of oil. Once he did that the US would be an alternative.

Putin cannot lose his energy commodity strength or his entire geo-political equation falls apart. Russia makes almost nothing that anyone would actually pay good money for. if he loses oil – he is broke.

Natural gas has severe logistical problems, including cost, if we try to export it. We have even more natural gas than oil, and fracking increases the extraction rate there too — by a lot. However, that too doesn’t change how much is there, simply how fast you obtain it. The worse problem for natural gas is that transport is a bitch — pipelines work quite well for overland routes and the nice part of the deal is that you can use the gas being transported “neat” as fuel for the pumping station engines, so they’re not grid-reliant. The bad news is that the energy density as a gas sucks and CH4, which is what natural gas (mostly) is, happens to turn into a liquid only under cryogenic conditions. Therefore to ship it where you can’t pipe it you have to get it very cold (this requires a lot of energy) and keep it that cold (requiring even more energy) in transport. Then you need a source of heat (ultimately either water or the atmosphere) to re-warm it so it returns to gaseous form when it reaches its destination. All of this is expensive, it has severe safety concerns (a tanker full of LNG is a massive and really ugly bomb that first freezes anything it touches then goes up in a massive fireball) in the event of an accident or criminal action, and as of right now the infrastructure to do any of this doesn’t exist.
LNG cryo plants and the ships to move it once it has been cooled sound like an easy way out and a good investment, but one must look at the future, not the present. There is a lot of debate about whether extraction rates promoted by fracking will be viable for 20 or 40 or more years, and they have to be before you start building ships and cryo plants or you’re going to take horrific losses on a capital basis. Anyone with a bit of memory recalls the shale “boom” from the Arab Oil Embargo days, and what happened when price crashed and made all those plants that were half-done uneconomic.

Energy Secretary Ernest Moniz told POLITICO he’s open to consulting with Congress on the issue, but he stressed that the U.S. doesn’t have the capacity to flood Europe with gas. “The fact is it’s just physically not going to happen,” he said Wednesday. …

Well, not YET, due to previous stonewalling on building LNG terminals along the East Coast. Several years ago, before the fracking boom in PA and OH, some gas companies were floating the idea of building LNG terminals (for import from Trinidad) in Long Island Sound, Boston Harbor, and the Chesapeake Bay. The Long Island Sound terminal was singlehandedly shot down by then-CT Attorney General (now U.S. Senator) Dick Blumenthal (D-CT).

In the meantime, the Canadians built an LNG terminal on the New Brunswick coast, about 90 miles from the Maine border, and were planning to use it to import gas and send it to New England. If we now have more gas than we need, maybe we could make a deal with Canada to export it to Europe…

Putin’s power derives from the fact that most of Western Europe uses natural gas from Russia, and any attempt to apply economic sanctions against Russia could lead to shortages of natural gas. The British, to their credit, saw the light and have started fracking on their land and offshore in the North Sea.

Since we are now in March, it will soon be springtime, and natural gas demand in Europe will decrease during the spring and summer. If economic sanctions were applied against Putin now, the natural gas shortage in Europe would be short-lived, but could return in late autumn.

Now is the time to set up a gas-NATO or a gas-Marshall Plan–a crash program to build LNG export terminals along the Atlantic coasts of the US and Canada, and LNG import terminals along the Atlantic coasts of western Europe. Once Europe is weaned from Russian natural gas, it can apply sharp economic sanctions against Putin, whose money supply will be cut off.

It’s true that shipping liquefied natural gas across the Atlantic is more expensive than piping it from Russia. But would Europe prefer to buy their gas from a friendly, protective eagle or an enraged bear like Putin?

Propane is like $6/gallon here in ND.
And some of that is bcs the Keystone has not been built.
There are other reasons as well, like exports.
It’s why I burn wood for our primary heat source.
But of course, that is bad evidently, so OBama would rather I die.
But live green!

Propane is like $6/gallon here in ND.
And some of that is bcs the Keystone has not been built.
There are other reasons as well, like exports.
It’s why I burn wood for our primary heat source.
But of course, that is bad evidently, so OBama would rather I die.
But live green!

Badger40 on March 6, 2014 at 9:46 PM

Differences in propane prices across the country have to do with 80-year old pro-greedy-union laws as much as the oil industry:

1) Someone please explain to me how we can claim to want energy independence and also want to export it as fast as we get it

2) How fungible is oil if it takes years to build new distribution systems, refineries, and retool transportation?

3) Why would Europe struggle to become energy independent from Russia if we agree to sell them most of ours?

4) How can we stop propping up autocratic regimes if we’re still buying their oil and sending ours to Europe and Asia?

5) How could we leave warring Islamic oil states alone if they’re integral to our energy exchange system?

6) Is constitutional capitalism consistent with restricting international commerce with antagonistic autocracies that threaten our national security?

7) If we refuse to act in the interests of our nation, values and people by protecting critical resources that a few well connected people want to export (even if some of their profits trickle down) are we capitalists or corporatists?